Shein - The Controversial History

Summary

Shein, an online clothing retailer, has seen explosive growth, especially among Gen Z, becoming a global fashion powerhouse. Despite its popularity, controversies surround the brand, including allegations of forced labor, environmental impact due to its ultra-fast fashion model, tax law exploitation, and design copyright infringements. The company's mysterious origins and lack of transparency add to public concern. As Shein eyes an IPO, these issues may impact its valuation and public perception.

Takeaways

• 🚀 Shen has rapidly become a major player in the fashion industry, particularly popular among Gen Z, and has even surpassed Amazon as the most downloaded shopping app in the United States.
• 💸 Shen's annual sales are estimated to be around $30 billion, and in April 2022, the company was valued at $100 billion after a funding round.
• 🌐 Shen's origins are in China, where it started as a consumer products seller and later pivoted to focus on fashion, particularly wedding dresses and women's clothing.
• 🔍 The company's operations and supply chain are shrouded in mystery, with limited public information available, which has led to concerns about transparency.
• 🏭 Allegations of forced labor and poor working conditions in Shen's supplier factories have been raised, with some factories accused of violating local labor laws.
• 🌳 Shen has been criticized for its environmental impact, being part of the 'ultra-fast fashion' trend that contributes to waste and overconsumption.
• 💰 Shen has been accused of exploiting tax laws by shipping small packages directly to consumers, thus avoiding tariffs and inspections that would apply to larger shipments.
• 🚫 The company has faced numerous lawsuits for copying designs and using trademarked or copyrighted material without permission.
• 🚫 Shen has been criticized for selling offensive items, such as a necklace resembling a swastika, which they claimed was a Buddhist symbol.
• 🔒 In 2022, Shen was fined $1.9 million for failing to properly disclose a data breach that affected 39 million customers.

Q & A

What is Shen's primary market?

The primary market for Shen is the United States.

How has Shen's popularity grown, especially among Gen Z?

Shen's popularity has grown significantly during the pandemic, particularly among Gen Z, due to the widespread sharing of haul videos on platforms like TikTok and YouTube showcasing their products.

What is Shen's current estimated annual sales figure?

Shen's annual sales are estimated to be around $30 billion.

What controversies have been associated with Shen's labor practices?

Shen has faced allegations of forced labor and other questionable labor practices, including violations of local labor laws and reports of employees working long hours for low pay.

Why has Shen's IPO been facing challenges?

Shen's IPO has been facing challenges due to controversies such as allegations of forced labor, sourcing cotton from Xinjiang, China, and other environmental and legal issues.

What is Shen's stance on the allegations of using forced labor?

Shen has denied the allegations of using forced labor, stating that they have a zero-tolerance policy towards it and have dedicated $15 million to improving their standards.

How does Shen's ultra-fast fashion model contribute to environmental concerns?

Shen's ultra-fast fashion model, which focuses on quickly producing and selling cheap clothing, leads to a high turnover of garments and packaging waste, contributing to environmental concerns.

What is the controversy surrounding Shen's import taxes in the US?

Shen has been accused of exploiting US tax laws by shipping small packages valued under $800, which are exempt from tariffs and inspections, potentially giving them an unfair advantage over competitors.

How has Shen been accused of copying designs and using copyrighted material?

Shen has faced multiple lawsuits for copying designs and using trademarked or copyrighted material without permission, from both small independent creators and larger brands.

What are some of the offensive items Shen has been criticized for selling?

Shen has been criticized for selling items that were seen as racist or insensitive, such as a swastika necklace, which they claimed was meant to represent a Buddhist swastika.

What are some other controversies mentioned in the script related to Shen?

Other controversies include accusations of anti-competitive practices, a data breach affecting 39 million customers, and safety concerns due to the presence of high levels of chemicals in certain products.

Outlines

00:00

🚀 Shen's Meteoric Rise and Controversies

Shen, an online clothing retailer, has seen a dramatic increase in popularity, particularly among Gen Z, becoming a trendy topic on the internet. Despite not being part of this demographic, the channel creator finds Shen's growth and controversies relevant and concerning. Shen has become one of the world's largest fashion retailers, surpassing Amazon as the most downloaded shopping app in the U.S. with annual sales estimated around $30 billion. In April 2022, Shen was valued at $100 billion after a funding round. However, Shen is also associated with numerous controversies, including labor practices, environmental impact, and legal issues, which are categorized and discussed in the video.

05:01

🌍 Shen's Mysterious Origins and Labor Allegations

Shen's origins are shrouded in mystery, with limited public information about its founder and CEO. The company was started in 2008 in China to sell consumer products internationally, shifting its focus to women's clothing in 2012. Shen's operations are now headquartered in Singapore, with the U.S. as its primary market. The company's supply chain, largely based in China, has been under scrutiny for alleged labor law violations and poor working conditions. Shen has been accused of using cotton from the Xinjiang region.

Keywords

💡Shein

Shein is an online fashion retailer that has gained significant popularity, especially among Gen Z, due to its trendy and affordable clothing. The company's rapid growth during the pandemic has made it one of the most downloaded shopping apps in the United States, surpassing even Amazon. In the video, Shein is described as a divisive company with a mysterious background and several controversies, which are central to the video's exploration of its business practices and societal impact.

💡Gen Z

Gen Z refers to the demographic cohort following Millennials, typically those born between the mid-1990s and early 2010s. In the context of the video, Gen Z is highlighted as a key demographic for Shein's popularity, with many members of this group creating haul videos on platforms like TikTok and YouTube to showcase their purchases from the brand.

💡Haul videos

Haul videos are a type of content popular on social media platforms where individuals share their recent purchases, often of clothing or fashion items. The video mentions that Shein's products are frequently featured in haul videos, which serve as a form of free promotion for the brand and contribute to its popularity among younger audiences.

💡Fast fashion

Fast fashion is a term used to describe the rapid production and turnover of inexpensive clothing to meet quickly changing fashion trends. The video discusses how Shein has taken fast fashion to the 'ultra-fast' level, with an efficient operation that allows it to predict trends and produce new items quickly, contributing to its success but also raising environmental concerns.

💡Controversies

Controversies in the video refer to the various allegations and issues surrounding Shein's business practices. These include labor practices, environmental impact, tax policies, and copyright infringements. The video aims to inform viewers about these controversies to help them form their own opinions about the company.

💡Labor practices

Labor practices are the policies and conditions under which a company's workers are employed. The video mentions allegations of forced labor and other questionable labor conditions in some of Shein's supplier factories, which have raised concerns about the company's ethical standards.

💡Environmental impact

The environmental impact of a company refers to the effects its operations have on the natural environment. The video discusses how Shein's ultra-fast fashion model leads to a high turnover of cheaply made clothing, which contributes to waste and environmental degradation, despite the company's claims of efficiency.

💡Tax laws

Tax laws are the regulations governing the taxation of goods and services. The video points out that Shein, like other online retailers, may benefit from certain tax laws that make it cheaper to ship small packages directly to consumers, which some argue gives them an unfair advantage over brick-and-mortar stores.

💡Copyright infringement

Copyright infringement occurs when a company uses copyrighted material without permission. The video mentions several lawsuits against Shein for copying designs or using trademarked material, suggesting a pattern of behavior that has legal and ethical implications.

💡IPO

An Initial Public Offering (IPO) is when a company first offers its shares to the public, typically to raise capital. The video discusses Shein's intention to go public, which would require increased transparency and potentially shed more light on the company's operations and controversies.

💡Data breach

A data breach is a security incident in which sensitive information is accessed without authorization. The video mentions a data breach at Shein that affected millions of customers, highlighting the company's responsibility to protect consumer data and the potential consequences of failing to do so.

Highlights

Shein's popularity exploded during the pandemic, especially among Gen Z, becoming a trendy internet topic.

Shein has become one of the world's largest fashion retailers, surpassing Amazon as the most downloaded shopping app in the US.

Annual sales are estimated to have grown about 10 times over the past 5 years, reaching around $30 billion.

In April 2022, Shein was valued at $100 billion after a funding round, a high valuation for a relatively new private company.

Shein's founder and CEO remains a mystery, with conflicting information about their identity.

Shein started in 2008 in China, initially selling various consumer products before focusing on fashion in 2012.

Shein's headquarters moved to Singapore, and the US became their primary market.

Shein's supply chain is mysterious, with most products shipped from China under unclear conditions.

Shein has been hosting pop-up stores and plans a public stock offering, which may increase transparency.

Allegations of forced labor and poor working conditions in Shein's Chinese suppliers have been raised.

Shein has been accused of using cotton from the Xinjiang region.

Transcripts

[Music]

Shen is an online clothing retailer

whose popularity started exploding

during the pandemic and has only

continued to grow from there

specifically for Gen Z it has become one

of the trendiest topics on the internet

over the past few years seemingly

everyone has been making these haul

videos on Tik Tok and YouTube more so

Tik Tok sharing all of the new clothes

and accessories that they recently

bought from Sheen now even if you are

outside of that demographic much like

myself I think this topic is still

relevant interesting and potentially

concerning it is almost hard to believe

that shien has quickly become one of the

biggest fashion retailers in the world

even surpassing Amazon is the most

downloaded shopping app in the United

States their annual sales are estimated

to have grown about 10 times larger over

the past 5 years currently sitting

around the $30 billion range in April of

2022 Sheen had a round of funding that

Val valued them at $100 billion a figure

that is almost unheard of for a

relatively new privately owned company

like this for context H&M one of their

main competitors is valued around 25

billion so clearly Sheen has quickly

become a big deal in the industry which

could potentially be an issue given all

these controversies and Scandals that

they have been attached to it seems like

the list never ends but in this video I

want to highlight some of the bigger

ones by grouping them into categories

that will hopefully inform you enough to

draw your own conclusions about this

divisive company that has clearly been

taking over the fashion industry I want

to start off the list by talking about

how mysterious they are seriously that

is one of the most common words that

headlines used to describe them out of

all the companies I've covered on this

channel I would say that Shen is the

most secretive I've never seen so much

conflicting information even the name of

the founder and CEO of the company has

been unclear it has been widely reported

as Chris Sue but then corrected to Sky

suit I don't know because he's not

exactly a public figure what I can say

for sure is that he started the company

in 2008 with three others in China to

sell various consumer products to other

countries around the world in 2012 they

switched their main focus to selling

wedding dresses along with other women's

clothing and to reflect that they came

up with the new name she inside as one

long word 3 years later she inside was

shortened to she in I guess to make it

year and more searchable since then they

have moved their headquarters to

Singapore and started selling to almost

every country around the world but the

United States has become their primary

market so now it is a situation where us

consumers order something from Sheen

over the Internet it is shipped like

7,000 miles across the Pacific Ocean

arrives at your door and you have no

idea how it was made or how it got there

even if you try to research it you are

not going to find a lot of reliable

information about Shen however that may

be changing they have been hosting these

popup stores in select cities to make

customers more familiar with the brand

giving them an actual tangible presence

but it's looking like the bigger change

will happen with their public stock

offering they have expressed intentions

to become a publicly traded company in

the United States seeking a valuation of

$90 billion if that happens they'll be

required to file a prospectus and

quarterly Financial figures and all this

other information that as of right now

is not really out there but they have

been having issues getting the IPO

happening partially due to some of the

other controversies on my list the main

one being allegations of forced labor

along with other sketchy labor practices

through its entire existence most of

Shen's 6,000 suppliers have been in

China meaning that most of the stuff you

buy from the website was manufactured

within that country and the conditions

at some of those factories have been

questionable in 2021 a report found that

a couple of them were violating local

labor laws by working too many hours and

then the following year there was a

British documentary that alleged

employees at the factory were being paid

$20 a day often times working up to 18

hours a day with only one day off a

month yeah they were bad conditions that

motivated the ban the Rolling Stones to

terminate a licensing agreement that

they had recently made to feature their

logo Sheen responded by hiring

independent Auditors that concluded that

most of the allegations were false and

then dedicated $15 million to improving

their standards but probably the most

concerning of the accusation in this

category and one of the bigger hurdles

in getting that IPO is the area in which

they Source their cotton in short the US

has ban the import of goods that are

tied to the shinyang region of China

because of human rights violations

against an ethnic group there trust me

that is a whole upsetting tangent but

Sheen has been accused of using cotton

from that region they have denied the

allegation saying that they have a zero

tolerance policy when it comes to force

labor but again it's become this

mysterious suspicion maybe the biggest

cont controversy involves the Sheen's

impact on the environment this right

here has been an ongoing concern

throughout the fast fashion industry

I've already talked about it in past

videos I made about other fast fashion

retailers like H&M and Forever 21 but in

short fast fashion is all about cheap

clothing you don't pay all that much for

it but it's also not built to last it

creates a lot of waste as consumers

throw away their old clothes that have

quickly worn out in favor of buying the

new style do you see what I mean well

Sheen has taken this to the next level

with what has been called Ultra fast

fashion they truly do have an efficient

operation that enables them to sell new

and trendy items considerably faster

than most others they use consumer data

to predict new trends they buil strong

relationships with Chinese manufacturers

so they can get it made quickly they

have a system where they only place

small orders initially so that they can

gauge The public's interest and then

make larger ones if that goes well that

way they're only making stuff that

people want to buy they say that only 2%

of their clothing goes unsold at saving

on warehouse storage costs and just

evidence of an efficient operation all

of this means that they could sell their

items at a comparatively lower price

oftentimes just a few dollars that

allows younger Tik Tok users and whoever

else to buy it regularly and make their

haul videos which serves as free

promotion saving on Advertising costs

yeah they have an effective system I

should say that they do outline some of

their environmental efforts on their

website but the quick turnover of

cheaply made clothing undeniably

produces a lot of waste along with the

packaging used for all these individual

shipments I don't want to speak for her

but my guess is that mother nature is

not the biggest fan of Sheen next up on

the list there's been debate surrounding

the taxes paid by Sheen specifically the

import taxes the US has a law that

essentially makes it easier and cheaper

to ship small packages into the country

if a package has a value of less than

$800 there are no tariffs that have to

be paid and it doesn't have to be

inspected imagine if Sheen were shipping

their products to a store in the US like

H&M and many other competitors well

their shipments would be much larger and

almost certainly valued well over $800

but because they ship their items

straight to the customer it would have

to be a large order to exceed that $800

limit most of them are well under 100 it

is a very similar situation over at teu

and the two of them combine for

something like a third of all shipments

into the US that qualify for this

exemption they're not necessarily doing

anything illegal here as far as I know

but many people feel that she and and

teu have become so successful because

they exploit the tax law and that law

should be changed another big

controversy has been their history of

copying designs along with using

trademarked or copyrighted material

without permission they have been

involved in dozens of lawsuits involving

this now you have to remember that fast

fashion retailers have to put out a lot

of new stuff quick they have to really

keep up with the latest Trend so

literally thousands of new items are

posted to their website daily you can

see how this would be be motivation to

quickly imitate an existing design that

has already been proven or at the very

least you could see how something could

slip through the cracks if not properly

supervised sometimes the design has been

taken from smaller independent creators

and sometimes it's taken from well-known

larger ones for example they were

accused of copying this sweater from a

smaller Nigerian brand the original

company sold it for

$330 while the sheen version of it sold

for

$17 I mean sure it's probably not nearly

as well but that is 95% cheaper and you

just can't compete with that larger

brands that have accused them of copying

include Oakley and stucy most recently

it was the Japanese company uniclo that

sued Shen for allegedly copying their

Mary Poppins carry all there was a

settlement with the copyright owner of

the band Nirvana because Sheen used some

of their album covers on their shirts

without permission Sheen says that they

have put together a team to review the

products to make sure that it doesn't

keep happening like this but I don't

know it seems to keep keep happening

next up along the same lines of letting

items slip through the cracks how about

the sale of offensive items yeah there

have been multiple examples of items

being sold there that were seen as

racist or insensitive that probably

should not have been sold there the most

reported example was a swastika necklace

that they say was meant to portray a

Buddhist swastika but they quickly took

responsibility for the mistake and

apologized for doing it I honestly don't

want to spend too much time on this one

for obvious reasons but there are a few

other examples and every time time it

happens it stirs up a bunch of

controversy in the news so that's why I

felt the need to at least mention it

here I'm going to start going faster

here because the rest of these are more

straightforward or isolated so I don't

feel the need to go into too much detail

Shen has been accused of engaging in

anti-competitive practices doing things

that unfairly pull them ahead of the

competition most notably there have been

back and forth lawsuits between shien

and timu the most recent one in December

of 2023 accusing shien of various Shady

tactics to establish a monopoly over

Chinese manufacturers and the US markets

that lawsuit uses the phrase Mafia style

intimidation of suppliers saying that

they have been threatening to impose

penalties if they do business with a

rival keep in mind that these are

accusations from a competitor but this

is a high-profile lawsuit going back to

the list a data breach in 2022 they were

finded $1.9 Million by New York for

failing to properly disclose a data

breach that affected 39 million

customers another one would be safety

concerns in 2021 there was a study by

CBC in Canada that found ridiculously

high levels of chemicals in certain

products that were bought from Sheen

including this jacket for toddlers that

they say had 20 times the amount of lead

that is safe for children I'm being

careful to not dilute my list by picking

out every little issue that anyone has

ever had with Sheen but I do feel like

everything I mentioned here is pretty

serious this is a large company with a

global impact that is probably going to

become even more relevant as time goes

on so if anything in this video is

concerning to you I recommend you

continue to look deeper into it and act

accordingly or maybe just wait until

more information comes out so we can get

a fuller picture of Sheen they've been

making a lot of waves lately so my

intention here is simply to make you

more aware of what has been happening

with them and potentially raise some

suspicions let me know in the comments

what do you think about Shen are they a

harmless company that sells trendy

clothing at amazing deals or a

mysterious Troublemaker that needs to be

thoroughly investigated before they can

win over your approval or potentially

somewhere in between I hope this video

came off his objective I'm truly not

trying to persuade you of anything but

at the same time these are serious

controversies that I think you should at

least be aware of so any thoughts you

have about Sheen or anything else in

this video leave them in the comments

I'd like to hear what you have to say

thank you for

[Music]

watching

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